NEW DELHI: Tracking and declaring myriad transactions while filing tax returns is set to become a lot easier for individuals, with the Finance Bill proposing to include details like property and share transactions in Form 26AS from June this year.
Experts say the move shifts India steadily closer to a pre-filled tax return regime.
Mandatorily compiled and made available to the assessee by the I-T department, the form had until now displayed only details of tax deducted at source (TDS) and high-value transactions provided by banks.
Thanks to advancing technology, “multiple information... such as sale/purchase of immovable property, share transactions etc are being captured or proposed to be captured,” noted the budget memorandum. The tax department will now need to provide this information to the assessee to “facilitate compliance”.
Since the move extends the ambit beyond TDS information, Section (203AA) of the I-T Act is proposed to be scrapped. A new Section, 285BB, will be introduced mandating the taxmen to upload “a statement... setting forth such information, which is in the possession of an income-tax authority,” the memo said.
‘A step forward in pre-filled tax returns’
The form can be downloaded from the assessee’s registered account on the I-T web portal.
“It’s a step forward in the direction of pre-filled tax returns,” said Sonu Iyer, partner, people advisory services, EY, “The government is expecting to directly source financial transaction data, add it to the Form 26AS and then from there on to the employee’s tax return”.
Iyer added more clarity is needed on certain issues, like how the data for months of April and May will be presented since the system will go into effect from June 2020.